**EXHIBIT 20.1**

 

222 Lakeview Avenue, Suite 1500, WestPalm Beach, FL  33401

 

***NEWS RELEASE***

 

**CRUZAN INTERNATIONAL, INC. ANNOUNCESFINANCIAL RESULTS**

**FOR SECOND QUARTER AND SIX MONTHS ENDED MARCH 31,2005**

 

WEST PALM BEACH, FLORIDA – May 18, 2005– Cruzan International, Inc. (AMEX: RUM), producer and distributor of theCruzan line of rums from the Virgin Islands and a leading distiller of rum andbrandy, and importer and marketer of premium branded spirits, today reportedfinancial results for its second quarter and six months ended March 31,2005.

 

Net sales for fiscal 2005’s six-month periodwere $49,703,827, compared with $44,481,495 reported for fiscal 2004’s secondquarter.  Gross profit was $16,930,617,compared to $15,905,993 in the same period last year, and six-month net incomewas $78,306, or $0.01 per diluted share, compared with net income of $1,969,814or $0.35 per diluted share, one year ago.

 

Net sales for fiscal 2005’s second quarterwere $25,511,634, compared with $22,039,843 reported for fiscal 2004’s secondquarter.  Gross profit was $8,855,625,compared to $8,329,364 in the same period last year, and second quarter netloss was $70,784, or $0.01 per diluted share, compared with net income of$1,118,530 or $0.20 per diluted share, one year ago.

 

Commenting on the results, Jay S. Maltby,Chairman and Chief Executive Officer said, “Once again, I am pleased toannounce another period of double digit growth for our Cruzan brand, with netsales increasing 34.7% and 30.5% over last year’s second quarter and six-monthperiod, respectively.  We continue to seeexcellent sales growth due to our continuing investment in building the Cruzanbrand.”

 

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Mr. Maltby continued, “Sales in our bulkalcohol and vinegar and cooking wine segments have improved, although we areexperiencing pressure on margins as we continue to realize increased energy andraw material costs and resistance to price increases from customers in thesebusiness segments.  We have completed themost recent round of cost reductions in our bottling operations during thesecond quarter and, while sales in this segment have declined again, we expectto see improvement in the bottom line of our bottling operations in futurequarters.”

 

Cruzan International, Inc. is a majorsupplier of rum, brandy and wine to the beverage alcohol industry.  The Company also produces ultra-premiumsingle-barrel aged rums and tropical rums, vinegar and other alcohol-relatedproducts.

 

Statements contained in this press release,other than historical facts, are “forward-looking statements” within themeaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities and Exchange Act of 1934. Cruzan intends that such forward-looking statements shall be subject tothe safe harbors created thereby.  Thesestatements involve various risks and uncertainties, including withoutlimitation those contained in the section entitled “Risks that May AffectFuture Results” in Item 7, “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” in Cruzan’s Annual Report on Form 10-Kfor the fiscal year ended September 30, 2004.  As a result, future results may differmaterially from the expected results represented by the forward looking-statementscontained in this press release.

 
| Contact:                                    | Ezra Shashoua, Executive Vice  President & Chief Financial Officer |
|---------------------------------------------|-----------------------------------------------------------------------------|
|                                        | William Viggiano, Vice President &  Controller                     |
|                                        | 561-655-8977                                                                |
|                                        |                                                                        |
| —***Financial Results  Follow—*** |

 

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CRUZAN INTERNATIONAL, INC.

Statements of Income

 
| **Periods ended  March 31,**          | ** ** | **Three  Months** | ** ** | **Statement of Income  as a****%****of********Net Sales** | ** ** |
|--------------------------------------------|------------|-------------------|------------|-----------------------------------------------------------|------------|
| **2005**                                   | ** ** | **2004**          | ** ** | **2005**                                                  | ** ** | **2004** |
|                                       |       |              |       |                                                      |       |   |   |   |   |   |   |
| Net sales                                  |       | $                 | 25,511,634 |                                                      | $          | 22,039,843 |   | 100.0 | % | 100.0 | % |
| Cost of  sales                             |       | 16,656,009        |       | 13,710,479                                                |       | 65.3 | % | 62.2 | % |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Gross profit                               |       | 8,855,625         |       | 8,329,364                                                 |       | 34.7 | % | 37.8 | % |
| Selling,  general and administrative       |       | 8,852,881         |       | 6,939,238                                                 |       | 34.7 | % | 31.5 | % |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Operating  income                          |       | 2,744             |       | 1,390,126                                                 |       | 0.0 | % | 6.3 | % |
| Interest expense                           |       | (771,673          | )          | (709,435                                                  | )          | (3.0 | )% | (3.2 | )% |
| Other  income, net                         |       | 205,172           |       | 388,175                                                   |       | 0.8 | % | 1.8 | % |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Income  (loss) before income taxes         |       | (563,757          | )          | 1,068,866                                                 |       | (2.2 | )% | 4.8 | % |
| Income tax  benefit                        |       | 492,973           |       | 49,664                                                    |       | 1.9 | % | 0.2 | % |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Net income  (loss)                         |       | $                 | (70,784    | )                                                         | $          | 1,118,530 |   | (0.3 | )% | 5.1 | % |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Earnings  (loss) per common share:         |       |              |       |                                                      |       |   |   |   |   |
| Basic                                      |       | $                 | (0.01      | )                                                         | $          | 0.20 |   |   |   |   |   |
| Diluted                                    |       | $                 | (0.01      | )                                                         | $          | 0.20 |   |   |   |   |   |
|                                       |       |              |       |                                                      |       |   |   |   |   |
| Common  shares and equivalents outstanding |       |              |       |                                                      |       |   |   |   |   |
| Basic                                      |       | 6,338,519         |       | 5,617,591                                                 |       |   |   |   |   |
| Diluted                                    |       | 6,338,519         |       | 5,722,369                                                 |       |   |   |   |   |
| Shares  outstanding at end of period       |       | 6,338,519         |       | 5,624,234                                                 |       |   |   |   |   |

 

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| **Periods ended  March 31,**          | ** ** | **Six Months** | ** ** | **Statement of Income  as a****%****of********Net Sales** | ** ** |
|--------------------------------------------|------------|----------------|------------|-----------------------------------------------------------|------------|
| **2005**                                   | ** ** | **2004**       | ** ** | **2005**                                                  | ** ** | **2004** |
|                                       |       |           |       |                                                      |       |   |   |   |   |   |   |
| Net sales                                  |       | $              | 49,703,827 |                                                      | $          | 44,481,495 |   | 100.0 | % | 100.0 | % |
| Cost of  sales                             |       | 32,773,210     |       | 28,575,502                                                |       | 65.9 | % | 64.2 | % |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Gross profit                               |       | 16,930,617     |       | 15,905,993                                                |       | 34.1 | % | 35.8 | % |
| Selling,  general and Administrative       |       | 17,158,891     |       | 13,630,445                                                |       | 34.5 | % | 30.6 | % |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Operating  income (loss)                   |       | (228,274       | )          | 2,275,548                                                 |       | (0.4 | )% | 5.1 | % |
| Interest  expense                          |       | (1,364,341     | )          | (1,406,418                                                | )          | (2.7 | )% | (3.2 | )% |
| Other  income, net                         |       | 414,589        |       | 1,003,425                                                 |       | 0.8 | % | 2.3 | % |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Income  (loss) before income taxes         |       | (1,178,026     | )          | 1,872,555                                                 |       | (2.3 | )% | 4.2 | % |
| Income tax  benefit                        |       | $              | 1,256,332  |                                                      | 97,259     |   | 2.5 | % | 0.2 | % |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Net income                                 |       | $              | 78,306     |                                                      | $          | 1,969,814 |   | 0.2 | % | 4.4 | % |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Earnings per  common share:                |       |           |       |                                                      |       |   |   |   |   |
| Basic                                      |       | $              | 0.01       |                                                      | $          | 0.35 |   |   |   |   |   |
| Diluted                                    |       | $              | 0.01       |                                                      | $          | 0.35 |   |   |   |   |   |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Common  shares and equivalents outstanding |       |           |       |                                                      |       |   |   |   |   |
| Basic                                      |       | 6,338,519      |       | 5,598,122                                                 |       |   |   |   |   |
| Diluted                                    |       | 6,465,182      |       | 5,696,128                                                 |       |   |   |   |   |
|                                       |       |           |       |                                                      |       |   |   |   |   |
| Shares outstanding  at end of period       |       | 6,338,519      |       | 5,624,234                                                 |       |   |   |   |   |

 

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CRUZAN INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

 
| ** **                                       | ** ** | ** **         | ** **  | ** **             | ** ** | **Balance Sheet  as a****%****of********Total Assets** | ** ** |
|--------------------------------------------------|------------|--------------------|-------------|------------------------|------------|--------------------------------------------------------|------------|
| ** **                                       | ** ** | **March 31,** | ** **  | **September 30,** | ** ** | **March 31,**                                     | ** ** | **September 30,** | ** ** |
| ** **                                       | ** ** | **2005**           | ** **  | **2004**               | ** ** | **2005**                                               | ** ** | **2004** | ** ** |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| ASSETS                                           |       |               |        |                   |       |                                                   |       |   |   |
| CURRENT  ASSETS                                  |       |               |        |                   |       |                                                   |       |   |   |
| Cash and  short-term investments                 |       | $                  | 4,478,911   |                   | $          | 3,833,828                                              |       | 3.4 | % | 3.0 | % |
| Receivables                                      |       | 18,643,633         |        | 20,418,736             |       | 14.3                                                   | %          | 16.0 | % |
| Inventories                                      |       | 32,660,181         |        | 29,162,496             |       | 25.0                                                   | %          | 22.8 | % |
| Other  current assets                            |       | 7,988,709          |        | 7,736,190              |       | 6.1                                                    | %          | 6.1 | % |
| Total  current assets                            |       | 63,771,434         |        | 61,151,250             |       | 48.9                                                   | %          | 47.8 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| PROPERTY AND  EQUIPMENT, net                     |       | 39,104,757         |        | 39,949,850             |       | 30.0                                                   | %          | 31.3 | % |
| OTHER ASSETS                                     |       | 27,593,130         |        | 26,731,526             |       | 21.1                                                   | %          | 20.9 | % |
| Total assets                                     |       | $                  | 130,469,321 |                   | $          | 127,832,626                                            |       | 100.00 | % | 100.0 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY        |       |               |        |                   |       |                                                   |       |   |   |
| CURRENT  LIABILITIES                             |       |               |        |                   |       |                                                   |       |   |   |
| Current  maturities of long-term debt            |       | $                  | 34,500,000  |                   | $          | 4,000,000                                              |       | 26.4 | % | 3.1 | % |
| Accounts  payable                                |       | 12,160,954         |        | 11,868,947             |       | 9.3                                                    | %          | 9.3 | % |
| Other  accrued expenses                          |       | 2,601,494          |        | 4,726,253              |       | 2.0                                                    | %          | 3.7 | % |
| Total  current liabilities                       |       | 49,262,448         |        | 20,595,200             |       | 37.8                                                   | %          | 16.1 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| LONG-TERM  DEBT, less current maturities         |       | 93,312             |        | 25,674,240             |       | 0.1                                                    | %          | 20.1 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| DEFERRED  INCOME TAXES                           |       | —             |        | 648,000                |       | —                                                 |       | 0.5 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| OTHER  LIABILITIES                               |       | 1,211,317          |        | 1,091,248              |       | 0.9                                                    | %          | 0.9 | % |
|                                             |       |               |        |                   |       |                                                   |       |   |   |
| STOCKHOLDERS’  EQUITY                       |       | 79,902,244         |        | 79,823,938             |       | 61.2                                                   | %          | 62.4 | % |
| Total  liabilities and stockholders’ equity |       | $                  | 130,469,321 |                   | $          | 127,832,626                                            |       | 100.00 | % | 100.0 | % |

 

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